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How much is a piece of content worth, by Bryan Goldberg


Stashed in: Blogs!, Advertising, Monetization, Brilliant Insight, Advertising, Valuation, @bgoldberg

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Bryan Goldberg was the co-founder of Bleacher Report.

I'll start with Bryan's conclusions:

If you are a freelance journalist, don’t expect to get paid $500 per article. The economics of print journalism in the 1990s may have been different, but in today’s digital age, they are what they are.

It takes hundreds (if not thousands) of articles to cross “the line” each month. The typical article will directly monetize tens not hundreds of dollars worth of eyeballs. And sponsored content is still a new concept.

To be honest, Nate Thayer’s article was probably worth a lot closer to $0 than it was to $500.

And while he deserves our respect for his willingness to risk life and limb in the name of his craft…nobody — not Nate Thayer, not The Atlantic, and not I — can do a damn thing about that great leveler:

The market.

It surprises me to learn that...

1. Great content isn't worth that much.

2. Brand-name websites can command premium brand advertising rates but individual contributors (and "blog networks"!) for the most part cannot.

speaking of blog networks, perhaps Coudal found a compromise via The Deck: http://decknetwork.net/

Maybe, but it's unclear that The Deck crossed the line of millions of monthly readers.

I wanted to know more about "the line" that Bryan talks about, and he obliges:

A digital publisher begins its existence by trying to grow unique visitors as fast as it can, in order to cross “the line.”

What is “the line”?

Specifically, the line is the minimum number of unique visitors (as measured by ComScore) that a website must achieve each month in order to be viable in the eyes of major brand advertising agencies.

And every website has a line that they must cross.

For niche categories like Fashion, the line may be relatively low — just 1 or 2 million visitors. For larger categories, the line is harder to achieve.

At Bleacher Report, we found the line to be about three million unique visitors. Once we reached that point, we hired our VP of Sales, and our revenue increased significantly. Several agencies with which we spoke were comfortable advertising on a sports website with three million unique visitors, though some expressed that five million was more realistic.

An individual piece of content is valuable when it helps its publisher get past that line. Because if the publisher is on the wrong side of the line, then they cannot build a sales team and earn premium CPM rates. And no publishing business can thrive on third party sales.

This, of course, is terrible news for bloggers.

Very few blogs can earn the traffic necessary to cross any line. So even if a story goes viral and attracts a million visitors to the blog, it will still prove far less valuable without the context of a larger publisher who can hit that critical mass.

This is also bad for “blog networks” who can try to package multiple sites under one “umbrella” traffic number — but many advertisers still prefer to work with large individual websites. This was the great flaw in SBNation, our largest competitor who struggled to grow revenue at our pace. No individual blog in their network achieved great scale, which is why their CEO Jim Bankoff corrected course in launching TheVerge under one brand domain.

Crossing “the line” is essential. But so too is building a great brand.

Unfortunately for Nate Thayer, The Atlantic already has a great brand, so he alone will not move mountains for them. For that reason, newer publications like PandoDaily, TheVerge, or Bleacher Report can get more mileage out of “big name” contributors who can do more to advance the brand.

In fact, The Atlantic can probably do more to improve the author’s brand, not the other way around — just ask Anne Marie Slaughter.

The great dream that many bloggers once advanced… that big publishers would give way to a decentralized “sea of blogs” was always an untenable one. Because advertising is the lifeblood of publishing, and no blog will ever be able to cross “the line.”

The mathematics of monetizing content:

This is the easiest value to measure with regard to a piece of content. Everyone who understands the basics of advertising — heck, even a venture capitalist — knows how this equation works.

Impressions x CPM Rate = Dollars

To bring this to life, let’s use an example… A very successful article will attract 100,000 readers. If there are two impressions per page and a $1.00 CPM, then that article will generate $200. For most blogs, those rates are a best-case scenario. It would be very difficult to make a living in such a manner.

But for a successful website that has crossed “the line” and employs a strong sales force, then those rates could be much higher. Let’s say $5 CPM’s: An article for such a site might be worth $1,000 if it attracts 100,000 readers.

...

Even if his article is published on the day of a major advertising campaign that can generate $5 CPM’s, that does not guarantee that his article will partake in that campaign. Maybe his article went live at noon, right when the advertising campaign ended. Or maybe his article pertained to a presidential election, but the advertising campaign revolved around sports.

This variable highlights exactly how many things have to go right in order for his article to generate that $5 CPM:

The article has to: (a) be a hit, (b) be on a site with great advertising salespeople, (c) run during an advertising campaign, and (d) run on a day when advertising inventory was constricted enough such that some other article would not have been able to take its place.

Ouch, ouch, ouch, ouch, ouch for individual writers.

Now I understand why websites spend so much time building their brands.

Huffington Post, Business Insider, The Atlantic, and other branded websites can command a premium that allows them to ride out all of the variance.

Bryan specifically says: "It is unlikely that the average piece by a quality freelance journalist is going to generate more than $500 of revenue on a consistent basis. Let alone the $5,000+ it probably needs to generate in order to contribute to a profitable overall business."

Ouch for individuals.

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